0Income Tax is one if the Direct Taxes levied by the Central Government. In India, the Central Board of Direct Taxes (CBDT) Administers the Income Tax Act 1962.
Let us understand few of the basic concepts of the Subject:
1. Income- Income includes all the revenues, profits, allowances, dividends, donations, perquisities, compensations, cash assistancies, subsidies, refunds, winning amounts, etc that is received by a person, who is supposed to assess and pay the Income Tax.
2. Person- A person may be an Individual, HUF, Firm, Corporate Body, Independent Legal entities, Artificial Judicial Person, Association of Persons, etc. All of them are subject to income tax.
3. PAN Number- A Permanant Account Number identifies a person to the Income Tax Department.
4. Assessement Year- It is a period of 12 months which follows the previous year. Assessment/ valuation of Income tax takes place during the assessment year.
5. Previous Year- It is a period of 12 months preceeding the Assesment year. PY is also known as the Financial year. This is the year in which a person earns income, which he is supposed to pay in the next year.
6. Taxable Income/Total Income- This is the Income on which tax is calculated. All the various heads of Income like Salaries, House properties, Capital Gains, Other sources, Business & Profession are added and Gross Total Income is arrived at. The deductions u/s 80ca- 80 U are subtracted from the Gross Total Income. The net Income thus remaining after allowing all the deductions is called as the Taxable Income.
